September 09, 2021
Social Security benefits are supposed to change annually to reflect the impact of inflation. In reality, the type of inflation seen by benefit recipients rarely reflects the actual increase in costs of such items as food, medical, etc. However, something is better than nothing.
Annual increases are not a sure thing. In 2009, 2010 and 2015 there was no increase and many of the other increases in recent years have been 2% or under. Have your annual expenses gone up 2% or less? Below is a table showing the Cost-of-Living Adjustments (COLA) over the last 20 years (from ssa.gov).
2021 will likely be a departure from the recent low COLAs. You’ve probably read that we are experiencing a burst of inflation. The discussion largely surrounds whether or not it is temporary and inflation will go down again.
But here’s the silver lining. It may result in a larger increase for Social Security recipients in 2022. The current forecast is for the COLA to increase in the range of 5.3 to 6.1% for 2022.